February 4, 2019

G.R. No. 232687

SLORD DEVELOPMENT CORPORATION, Petitioner

vs.
BENERANDO M. NOYA, Respondent

The Facts

Respondent was employed as a welder by petitioner, a domestic corporation engaged in the

business of manufacturing and processing of sardines and other canned goods.   Respondent's
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employment was covered by a CBA   between petitioner 'and Nagkakaisang Lakas ng

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ManggagawaKatipunan (NLM-Katipunan), the company's sole and exclusive bargaining agent for all
the regular rank-and-file employees.   
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Petitioner claimed that respondent asked several employees to affix their signatures on a blank
sheet of yellow paper for the purpose of forming a new union, prompting the president of NLM-
Katipunan to file expulsion proceedings against him for disloyalty.   Subsequently, respondent
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organized  a new union named the Bantay Manggagawa sa SLORD Development Corporation
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(BMSDC), which he registered with the Department of Labor and Employment (DOLE). 12

In the ensuing investigation, respondent failed to appear and participate at the scheduled hearings
before the ·union. Thus, NLM-Katipunan resolved,   with the ratification of its members, to expel
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respondent on the ground of disloyalty. Accordingly, a notice of expulsion was issued by NLM-
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Katipunan to respondent. Subsequently, a letter   was sent by NLM-Katipunan to petitioner,

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demanding his termination from employment pursuant to the union security clause of the CBA. After
notifying respondent of the union's decision to expel him and showing him all the documents
attached to the union's demand for his dismissal, respondent's employment was terminated. 16

Consequently, respondent filed a complaint   for illegal dismissal, unfair labor practice, and illegal
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deduction against petitioner before the National Labor Relations Commission (NLRC), asserting that
he did not violate any CBA provision since he validly organized BMSDC during the freedom period. 18

The LA dismissed the case for lack of merit,  ruling that respondent's dismissal was neither illegal
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nor an unfair labor practice. Among others, the LA held that petitioner was duty bound to terminate
respondent's employment after having been expelled by NLM-Katipunan for organizing a rival union.
Notably, NLM-Katipunan has a valid closed shop agreement in the CBA that required the members
to remain with the union as a condition for continued employment. 21

The NLRC affirmed the LA Decision. In so ruling, the NLRC held that while respondent had
committed an act of disloyalty that .caused his expulsion from NLM-Katipunan and subsequent
dismissal from work pursuant to the closed shop agreement provision of the CBA, petitioner failed to
provide respondent ample opportunity to defend himself through written notices and subsequent
hearing. 
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The CA granted respondent's petition, finding his dismissal to ·be illegal. It found no just cause in
terminating respondent's employment for lack of sufficient evidence to support the union's decision
to expel him, explaining that the act of soliciting signatures on a blank yellow paper was not
prohibited under the Labor Code nor could it be automatically considered as an act of disloyalty.
Finally, it also found respondent to have been deprived of procedural due process. 32
Whether or not respondent was illegally dismissed.

While not explicitly mentioned in the Labor Code,   case law recognizes that dismissal from
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employment due to the enforcement of the union security clause in the CBA is another just cause for
termination of employment.  Similar to the enumerated just causes in the Labor Code, the violation
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of a union security clause amounts to a commission of a wrongful act or omission out of one's own
volition; hence, it can be said that the dismissal process was initiated not by the employer but by the
employee's indiscretion.  Further, a stipulation in the CBA authorizing the dismissal of employees is
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of equal import as the statutory provisions on dismissal under the Labor Code, since a CBA is the
law between the company and the union and compliance therewith is mandated by the express
policy to give protection to labor;  thus, there is parallel treatment between just causes and violation
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of the union security clause.

To validly terminate the employment of an .employee through the enforcement of the union ·security
clause, the following requisites must concur: (1) the union security clause is applicable; (2) the union
is requesting for the enforcement of the union security provision in the CBA; and (3) there is
sufficient evidence to support the decision of the union to expel the employee from the union. 47

In this case, the Court finds the confluence of the foregoing requisites, warranting the termination of
respondent's employment. 1âшphi1

It is undisputed that the CBA contains a closed shop agreement stipulating that petitioner's
employees must join NLM-Katipunan and remain to be a member in good standing; otherwise,
through a written demand, NLM-Katipunan can insist the dismissal of an employee. Notably, the
Court has consistently upheld the validity of a closed shop agreement as a form of union security
clause.

Moreover, a closed shop agreement is an agreement whereby an employer binds himself to hire
only members of the contracting union who must continue to remain members in good standing to
keep their jobs.

Further, records show that NLM-Katipunan requested the enforcement of the union security clause
by demanding the dismissal of respondent from employment. In a letter , NLM-Katipunan asked
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petitioner to dismiss respondent from employment for having committed an act of disloyalty in
violation of the CBA's union security clause. NLMKatipunan explained that respondent solicited
support from employees and thereafter, formed and organized a new union outside the freedom
period.